A top judge has delved into the mind and motives of 18th Century Prime Minister William Pitt the Younger in ruling that the owners of a historic toll bridge cannot qualify for a £700,000 tax rebate.

Whitchurch Bridge has crossed the Thames on the border between Berkshire and Oxfordshire since 1792 – a time, similar to our own, when Mr Pitt was tackling a crippling national debt – and has its very own act of Parliament to mark its unique status.

The bridge, originally built by 10 local dignitaries using their own funds, who wanted it kept and replaced to serve local people for all time, is now in its third incarnation, and the latest cast iron Grade II-listed structure is decaying.

The Company of Proprietors of Whitchurch Bridge, whose 10 shareholders include direct descendants of the original builders, manages the landmark under the terms of the historic Whitchurch Bridge Act 1792 and wants to replace it with a new one.

The statute, re-enacted in 1988, stated categorically that the bridge would not be subject to any “rate, tax or duty whatsoever” and the company insisted it did not have to pay VAT on materials used in the construction of the new bridge.

However, Treasury lawyers won the debate in the High Court on December 13 after leading Mr Justice Burnett through a historical journey to the time of the notorious ‘window tax’, imposed by Mr Pitt.

The company argued the cash-strapped Parliament of 1792 had intended the bridge to be self-funding through tolls.

The perpetual immunity from tax was a just reward to the 10 benefactors for taking on the burden of a vital infrastructure project without recourse to public funds.

However, the judge upheld the Treasury’s arguments that the exemption was “not ubiquitous” and did not mean that the company was entitled to reclaim VAT it will have to pay on building materials and other costs of replacing the bridge.

Speaking of the debts that mired the country during Mr Pitt’s first tenure as Prime Minister, the judge observed: “There has rarely been a monarch or government in English or British history whose revenues comfortably exceeded expenditure.”

The company argued that Parliament’s intention had been to relieve the company of taxation “to the fullest extent allowed by law”, but the judge said that the introduction of VAT had not been contemplated by anyone in 1792.

Building materials, such as bricks, tiles, window panes and even wood, did not escape Mr Pitt’s depredations and, despite the exemption, the bridge builders were right from the start indirectly paying tax through their suppliers.

The judge emphasised that the company had not brought the case to court “out of any sense of narrow self interest”.

He said the likelihood is that the company’s VAT liabilities will result in users of the bridge paying higher tolls in future. Treasury lawyers had earlier argued that, if the company was held to be exempt from all forms of taxation, that would include not just VAT but national insurance contributions and PAYE for employees, vehicle excise duty and other levies.